Attack of the Multiple Monetization Schemes: Dr. Horrible Returns

As announced on the Dr. Horrible Twitter Feed, Dr. Horrible’s Sing-Along Blog, Joss Whedon’s three-part musical webisode, is now available in its entirety for free on Hulu (and, as well, on MySpaceTV). Created during the Writers Guild of America strike by Whedon, his brothers Jed and Zack, and Maurissa Tancharoen, Dr. Horrible stars Neil Patrick Harris (as the Dr. himself) along with Nathan Fillion and Felicia Day.

As explained in Joss Whedon’s Master Plan, the episodes were originally released online for free for a limited time period. On midnight, Sunday July 20 they were to disappear online only to be available for purchase on iTunes for $1.99 per episode or $3.99 for the entire three-part series.

According to MacLife, Dr. Horrible on iTunes was outselling other popular fare including Hannah Montana. MacLife states that, when originally offered online, the three episodes were watched almost two million times. MacLife then goes on to calculate:

If only one quarter of those viewers purchased the show, half a million people could have downloaded the series. At $3.99 for the three 13+ minute segments, Whedon’s company, Mutant Enemy, may have raked in $2 million for a series with a budget of a low six figures.

Of course, we don’t have any official figures for paid iTunes downloads, so this remains speculation. But it’s certainly intriguing to ponder. MacLife quotes Mike McGuire, vice president of media research for technology research company Gartner Inc. as saying “[The success of Dr. Horrible is] a manifestation of…the lower cost of production and the nearly zero cost of distribution. Distribution with iTunes, which is amassing and aggregating large audiences, is a no-brainer.”

As MacLife observes:

iTunes gives a small production company advantages that traditional media doesn’t — not the way viewers watch television, but how they pay for it. The idea for Dr. Horrible occurred during a four-month strike of the Writer’s Guild of America, where some of the issues revolved around compensation for new media. If independent companies are paid directly by the viewer, the problems with missing residuals are automatically nullified.

One assumes Whedon and crew are sharing in the ad revenues from the new free release on Hulu and MySpaceTV. It would be informative to know the revenue numbers Dr. Horrible ultimately generates from these various distribution venues. Content producers looking for ways to monetize their work online would love to know the details.

[Update:] Joss Whedon subsequently spoke with me about monetizing Dr. Horrible, along with many other topics, in an interview for Knowledge@Wharton: Joss Whedon’s Plan to Monetize Internet Content (Watch Out, Hollywood).